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Black Owned Mortgage Companies That Will Come to Your Aid
Black-owned mortgage companies are friends-in-need among the Black communities facing discrimination in traditional financial institutions. In fact, 2020 Home Mortgage Disclosure data revealed that conventional lenders turn down mortgages for Black people at a rate 80% higher than White applicants. And a recent Zillow survey found out that 59% of Black homebuyers are worried about being successful in their mortgage applications.
This article walks you through the definition of Black-owned mortgage companies, their importance, and some of the major mortgage firms serving black communities in the USA. Let's dive deeper.
Key Takeaways
- Black-owned mortgage companies are financial institutions that are 51% Black-owned and provide loans and related financial services.
- They often tailor their services to support and strengthen individuals, families, and business in the Black community
- OneUnited Bank leads the way in size and offerings
Disclaimer
The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning and financial management here. More on disclaimers here.
What's a Black-Owned Mortgage Company?
A mortgage lender or company is a specialized financial institution that originates and funds mortgages for commercial or residential real estate property. Often, it's just the originator of funding: it seeks potential borrowers and requests financing from client financial firms that offer the capital of the mortgage itself.
To be considered a Black-owned mortgage company, the institution must be at least 51% Black-owned. In other words, at least a majority of member share, shareholder equity, or other ownership interest in the firm should be owned by Black people.
What is the Difference between a Bank and a Mortgage Company?
A bank and a mortgage company are both financial institutions, but they differ in the types of financial services they offer.
A bank is a financial institution that offers a wide range of financial services to individuals and businesses, including savings accounts, checking accounts, loans, credit cards, investment services, and more. Banks are generally larger and more diversified than mortgage companies, and they often have multiple branches and locations.
On the other hand, a mortgage company is a financial institution that specializes in providing home loans, also known as mortgages. Mortgage companies typically offer a narrower range of financial services than banks, focusing primarily on mortgage lending and related services such as refinancing, home equity loans, and mortgage servicing.
One of the main differences between banks and mortgage companies is their funding sources. Banks obtain their funding from deposits made by customers, while mortgage companies typically obtain their funding from investors or other financial institutions.
Another key difference between banks and mortgage companies is their regulatory oversight. Banks are typically subject to more extensive regulatory oversight than mortgage companies due to their wider range of financial services and larger size. Mortgage companies, on the other hand, are generally subject to less regulatory oversight and may have more flexibility in terms of their lending policies and procedures.
Overall, while banks and mortgage companies may overlap in some areas of financial services, they have distinct differences in terms of their areas of specialization, funding sources, and regulatory oversight.
The Importance of Black-Owned Mortgage Companies and Banks
Every human being desires to improve their financial life. They need:
- Mortgages to buy real estates
- Personal loans to finance personal ambitions
- Commercial loans to finance business ambitions
- Checking accounts to store their money safely
The issue is that the African American community faces discrimination regarding accessing financial services in the traditional banks. The result of this has been a poverty-stricken population.
Better Alternative
That's where Black-owned mortgage companies, banks and credit unions step in. These institutions provide a better alternative to many in the Black community by tailoring their services to serve low-and-moderate income earners.
Less Risk-averse
Furthermore, they're more willing to accommodate higher risks than others. An Investopedia research revealed that 67% of Black-owned mortgages were either FHA ones- which usually serve riskier borrowers- or mortgages held "in portfolio," implying they're liable to any default.
Personalized Services
Black-owned mortgage companies and credit unions also tend to personalize their services for Black homebuyers, businesses, and nonprofits. All Black-owned banks are now community banks, dedicating their services to their customers and communities. These companies have always walked with customers even during tough times.
Historically Supportive
Remember the economic crisis that swept across the world from 2007 to 2008? Mortgage lending to Black people plummeted by 69%. Fortunately, Black-owned banks came through for them: The number of mortgages that these institutions offered shot up by 57%.
Low Interest
Thanks to Black-owned mortgage companies, vulnerable consumers don't have to depend on high-interest funding from payday lenders and pawnshops. Apart from offering individual customers financial resources, these companies also promote their communities' financial health and well-being.
Financial Literacy
Several Black-owned banks have programs geared towards uplifting financial literacy for vulnerable communities. The African-American population can now thrive in the modern economy and say goodbye to financial difficulties.
Top Black-Owned Mortgage Companies in the US
Here are our top picks:
1. Alamerica Bank
Alamerica Bank is a black-owned bank that focuses on serving minority and underserved communities in the heart of Birmingham, Alabama. It boasts of tailor-fitting its services to every client, no matter their background. Whatever your unique needs and life outlook, they'll take time to understand you and hold your hand. Some of the services they offer include:
- Working capital
- Line of credit
- Internet banking
- Image statement
- Mastercard debit cards
2014 witnessed the bank being recognized as Birmingham's most robust capitalized institution.
2. Carver Federal Savings Bank
Carver Federal Savings Bank started its operation in 1948 to give the Black communities more access to financial services. Most of its ATMs and branches can be found in low- to moderate-income areas.
Their services include:
- Online banking
- Community cash
- Business and personal banking
The bank has branches in Brooklyn, NY, Jamaica, NY, and Manhattan, NY.
3. Citizens Trust Bank
Since commencing its operations in 1921, Citizens Trust Bank has focused on serving the Black communities in Atlanta. It's still empowering African American populations. You can get Citizens Trust Bank branches in Atlanta, Georgia, Eutaw, Alabama, Birmingham, East Point, Ga, Stonecrest, Ga, and Stone Mountain, Ga.
It offers:
- Residential mortgages
- Checking
- Online banking
- borrowing
- Merchant services
- Cash management etc
4. City First Broadway
On April 1st, 2021, City First Bank merged with Broadway Federal Bank to form the leading Black-led Minority Depository Institution (MDI) nationwide. The MDI boasts more than $1B in assets and more than $700m in total deposits. That means it can comfortably serve a wider reach, deepen its lending impact, and spearhead its mission to channel finance where it's required most.
City First has its headquarters in Washington, DC, and runs three branches in DC and Los Angeles. It works with various nonprofits under a unified umbrella to support economic justice at scale.
Broadway Financial Corporation has its headquarters in Los Angeles, CA. It offers:
- Mortgages
- Savings
- Money market accounts
- Checking etc.
Since 1946, Broadway has been spearheading service equality with a focus on boosting the lives of underserved communities. It's also a member of FDIC.
The two companies' robust electronic delivery platform is a game-changer. Clients can bank anytime from anywhere without hassles, thanks to the 24/7 customer care, mobile app, and global ATM network.
5. City National Bank
City National Bank focuses on crafting personalized banking services for its customers. It has contributed a lot towards empowering urban black communities.
The institution provides several services, including:
- loans & credit,
- credit cards,
- bank accounts,
- wealth management,
- online & mobile,
- international banking
- treasury management,
- software solutions,
- business planning
- Private banking
City National Bank's top-notch rates and customer experience make it a reliable and number one choice among underserved communities.
The bank's widespread tentacles consist of branches in California, Delaware, Florida, Georgia, Massachusetts, Nevada, New York, Tennessee, Virginia, and Washington, DC.
6. Industrial Bank
Industrial Bank is well-known in Washington DC for partnering with personal accounts clients, homeowners, and small enterprises since 1934.
The bank aims at uplifting Black communities' financial and homeownership status. It offers:
- Savings and investments
- Checking
- Mortgages
- Credit cards
- Certificate of deposit account
- Cash management
- Support for nonprofits etc
Its primary locations include the Washington, DC metropolitan area, Newark, New Jersey, and Harlem, New York.
7. Legacy Home Loans
Headquartered in Las Vegas, Nevada, Legacy Home Loans is a mortgage firm that empowers African-American communities countrywide. This black-owned company prides itself in assisting its customers in developing sustainable wealth through owning property. Thus, you can build a family legacy that can last long after you've gone.
Are you looking to own a home? Legacy Home Loans will walk you through the mortgage loan process and the requirements. They offer in-depth resources plus advisors to help you through the journey.
Legacy is perfect for people living outside major metro regions who desire to work with a black-owned company. It has spread its wings to cities with many Black people. Its primary locations include Maryland, California, Texas, South Carolina, North Carolina, Missouri, Georgia, and Nevada.
8. Liberty Bank
Liberty Bank is a black-owned bank headquartered in Middletown, CT. It prides itself in being the third largest bank in Connecticut, having 60 banking offices spread all over the state.
Accessing services is a breeze, thanks to its widespread network. Apart from mortgages, the establishment provides:
- Savings
- Checking
- Electronic services
- Personal banking
- Cash citizens trust bank
- Management
You may get various loans from this bank: line of credit, home equity, and commercial estate loans.
9. OneUnited Bank
One United Bank is the leading and largest Black-owned bank in the US. It focuses on uplifting the Black population to close that stubborn racial gap that has haunted the community for ages.
The US Department of Treasury awarded it the highest Bank Enterprise Awards for its commitment to bettering people's lives. Thanks to its relentless efforts, OneUnited Bank became a Community Development Financial Institution (CDFI). They offer:
- Single-family residential loans
- Mobile banking
10. Seaway Bank
1965 witnessed Seaway Bank coming into existence in Chicago, Illinois (South Side) to serve Black communities. The founders wanted to change the Black person's story for the better amidst the high level of discrimination.
Initially, it was called Seaway National Bank of Chicago. 2017 saw it merging with Self-Help Federal Credit Union to boost its credit services. The institution is among the largest Black-owned banks in the country, promoting equality regarding financial service provision.
Services offered include:
- Home equity lines of credit
- Mobile banking
- Mortgage loans
Get the Help You Need
We believe you can get the funding you want to boost your lifestyle from these black-owned mortgage companies. Depending on your location, other Black-owned financial firms that will help you that you can check out are Democracy Federal Credit Union and MECU (Municipal Employees Credit Union) of Baltimore.
If you need expert advice on business financing, Bay Street Capital Holdings has a ready team of experts to guide you in applying for mortgages. Reach out to them here.
Bay Street Capital Holdings
Bay Street Capital Holdings is an independent investment advisory, wealth management, and financial planning firm headquartered in Palo Alto, CA. They manage portfolios with the goal of maintaining and increasing total assets and income with a high priority on managing total risk and volatility. Although many advisors may focus on maximizing returns, they place a higher priority on managing total risk and volatility.
Our founder, William Huston founded Bay Street after 13 years of supporting the United States' largest retirement plan ($650B) Thrift Savings Plan. He is recognized as Investopedia’s Top 100 Financial Advisors for 2021. In California, only two black-owned firms out of nineteen firms received this recognition.
In Scottsdale Arizona, Ekenna Anya-Gafu CFP, AAMS is recognized among the Best Financial Advisors for his responsiveness, friendliness, helpfulness, and detail. Bay Street was founded to advocate for diverse and emerging fund managers and entrepreneurs. In 2021, Bay Street was selected as a finalist out of over 900 firms across the US in the category of Asset Manager for Corporate Social Responsibility (CSR).
Sources
https://www.nerdwallet.com/article/mortgages/black-owned-mortgage-lenders
https://www.investopedia.com/black-owned-banks-by-state-5024944
https://www.businessinsider.com/personal-finance/black-owned-banks-credit-unions
